Yellen Sees 'Progress' in Rocky US-China Ties, Expects More Communication

US Treasury Secretary Janet Yellen, left, shakes hands with China's Vice Premier He Lifeng during their meeting at the Diaoyutai State Guesthouse in Beijing, Saturday, July 8, 2023. (Pedro Pardo/Pool Photo via AP)
US Treasury Secretary Janet Yellen, left, shakes hands with China's Vice Premier He Lifeng during their meeting at the Diaoyutai State Guesthouse in Beijing, Saturday, July 8, 2023. (Pedro Pardo/Pool Photo via AP)
TT

Yellen Sees 'Progress' in Rocky US-China Ties, Expects More Communication

US Treasury Secretary Janet Yellen, left, shakes hands with China's Vice Premier He Lifeng during their meeting at the Diaoyutai State Guesthouse in Beijing, Saturday, July 8, 2023. (Pedro Pardo/Pool Photo via AP)
US Treasury Secretary Janet Yellen, left, shakes hands with China's Vice Premier He Lifeng during their meeting at the Diaoyutai State Guesthouse in Beijing, Saturday, July 8, 2023. (Pedro Pardo/Pool Photo via AP)

US Treasury Secretary Janet Yellen said 10 hours of meetings with senior Chinese officials in recent days were "direct" and "productive", helping stabilize the superpowers' often rocky relationship as her four-day Beijing trip ended.
Before departing China on Sunday, Yellen said the United States and China remained at odds on a number of issues but expressed confidence that her visit had advanced efforts to put the relationship on "surer footing", Reuters said.
"The US and China have significant disagreements," Yellen told a press conference at the US embassy in Beijing, citing Washington's concerns about what she called "unfair economic practices" and recent punitive actions against US firms.
"But President (Joe) Biden and I do not see the relationship between the US and China through the frame of great power conflict. We believe that the world is big enough for both of our countries to thrive."
With US-China relations at a low over national security issues, including Taiwan, US export bans on advanced technologies, and China's state-led industrial policies, Washington has been trying to repair ties between the world's two biggest economies.
Secretary of State Antony Blinken visited Beijing last month, the first trip by the top US diplomat in Biden's presidency. Climate envoy John Kerry is expected to visit this month.
The US diplomatic push comes ahead of a possible meeting between Biden and President Xi Jinping at September's Group of 20 summit in New Delhi or a Asia-Pacific Economic Cooperation gathering scheduled for November in San Francisco.
Yellen said her visit aimed to establish and deepen ties with China's new economic team, reduce the risk of misunderstanding and pave the way for cooperation in areas such as climate change and debt distress.
"I do think we've made some progress and I think we can have a healthy economic relationship that benefits both of us and the world," she said, adding that she expected increased and more regular communications at the staff level.
Briefing reporters after the visit, a senior Treasury official said the trip as expected did not result in specific policy breakthroughs, but was "very successful" in terms of "re-establishing contact" and building relationships.
She said Chinese officials raised concerns about an expected US executive order restricting outbound investment, but she assured them any such measure would be narrow in scope and enacted in a transparent way, through a rule-making process that would allow public input.
Yellen said she told Chinese officials they could raise concerns about US actions, so that Washington could explain, and "possibly in some situations, respond to unintended consequences of our actions if they're not carefully targeted."
DECOUPLING WOULD BE 'DISASTROUS'
Yellen met with officials including Premier Li Qiang and People's Bank of China Deputy Governor Pan Gongsheng, whom she referred to as the head of the central bank, appearing to confirm his expected promotion.
She also met US companies doing business in China, climate finance experts and women economists.
In her meetings with officials, she urged more cooperation between the sides on economic and climate issues while criticizing what she called "punitive actions" against US companies in China.
She reiterated that Washington was not seeking to decouple from China's economy, as doing so would be "disastrous for both countries and destabilizing for the world."
The US has implemented export controls designed to restrict China's ability to acquire high-tech microchips that Washington fears could have military applications and is considering an executive order to curb US investment in sensitive areas.
But some US lawmakers want stronger action. A bipartisan group has proposed giving the government sweeping powers to block billions in US investment into China.
Yellen said she had emphasized to her Chinese counterparts that any investment curbs would be "highly targeted, and clearly directed, narrowly, at a few sectors where we have specific national security concerns," to avoid "unnecessary repercussions".
Yellen stressed that any executive order would not be for economic gain and talked through what such an order "might look like" with her Chinese counterparts, according to the senior treasury official.
Asked about plans by Brazil, Russia, India, China, and South Africa to create a common trading currency for their BRICS group, Yellen said she expected the dollar to remain the dominant currency in international transactions.
On Russia's war in Ukraine, she told her Chinese interlocutors it was "essential" that Chinese firms avoid providing Moscow with material support for the war or in evading sanctions.

 



Report: China Could Launch Military Drills Near Taiwan over President’s Pacific Visit

Taiwan President Lai Ching-te waves to the crowd on national day to mark the 113th birthday of the Republic of China, Taiwan's formal name, in Taipei, Taiwan October 10, 2024. (Reuters)
Taiwan President Lai Ching-te waves to the crowd on national day to mark the 113th birthday of the Republic of China, Taiwan's formal name, in Taipei, Taiwan October 10, 2024. (Reuters)
TT

Report: China Could Launch Military Drills Near Taiwan over President’s Pacific Visit

Taiwan President Lai Ching-te waves to the crowd on national day to mark the 113th birthday of the Republic of China, Taiwan's formal name, in Taipei, Taiwan October 10, 2024. (Reuters)
Taiwan President Lai Ching-te waves to the crowd on national day to mark the 113th birthday of the Republic of China, Taiwan's formal name, in Taipei, Taiwan October 10, 2024. (Reuters)

China is likely to launch military drills in the coming days near Taiwan, using President Lai Ching-te's upcoming trip to the Pacific and scheduled US transit as a pretext, according to assessments by Taiwan and regional security officials.

Lai will start a visit to Taipei's three diplomatic allies in the Pacific on Saturday, and sources told Reuters he was planning stops in Hawaii and the US territory of Guam in a sensitive trip coming shortly after the US election.

China, which views democratically governed Taiwan as its own territory and the most important issue in its relations with Washington, has a strong dislike of Lai whom Beijing calls a "separatist".

Lai's office has yet to confirm details of what are officially stop-overs in the United States, but is expected to do so shortly before he departs, sources familiar with the trip have previously said.

Beijing could conduct military maneuvers around or shortly after Lai's trip which ends on Dec. 6, said four officials in the region briefed on the matter, who declined to be identified due to the sensitivity of the matter.

China's defense ministry did not respond to a request for comment, though the government has urged the United States not to permit Lai to transit.

Chen Binhua, spokesperson for China's Taiwan Affairs Office, said on Wednesday that Lai's transit stops were "essentially provocative acts that violate the one-China principle".

Taiwan's defense ministry and the White House did not respond to a request for comment.

China has already staged two rounds of major exercises around Taiwan this year to pressure Taipei, one in May and one in October, dubbed "Joint Sword - 2024A" and B, respectively.

China could "repackage" ongoing regular military activities in the South China Sea or the East China Sea, moving them closer to Taiwan and rebranding them "Joint Sword - 2024C," according to a Taiwan security official.

Beijing could expand the size of its regular "joint combat readiness patrol" that typically involves naval and air force drills near Taiwan during Lai's visit and launch a "targeted" exercise towards the end of the trip, the source said.

Between 20 and 30 Chinese naval vessels are involved in the ongoing military maneuvers this week in the South China Sea, the source added.

'RED LINE'

Beijing wants to show the incoming US administration of President-elect Donald Trump that the first island chain is "China's sphere of influence" and Lai's trip could become a "pretext", the official said, referring to an area that runs from Japan through Taiwan, the Philippines and on to Borneo, enclosing China's coastal seas.

"Beijing hopes to draw a red line and establish its power" during the US government transition and extend its sphere of influence, the official said, adding the military drills were meant for the United States and its allies.

A second source, a Taiwan-based regional security official, said the drills would probably be more limited in scope than the two earlier rounds this year given unstable winter weather conditions in the Taiwan Strait.

A third source, familiar with security assessments around Taiwan, said China could use exercises in the coming weeks to test the bottom line of the Trump administration.

Two of the sources said more favorable weather conditions may prompt an earlier or delayed display of force in the days around Lai's trip.

Taiwan presidents typically take advantage of stop-overs in the United States going to and from far-flung allies to give speeches and meet with friendly politicians. Lai will be visiting the Marshall Islands, Tuvalu and Palau, three of the 12 remaining countries maintaining official diplomatic ties with Taipei.

It would not be unprecedented for China to respond militarily to this trip. It did so in August of last year when then-Vice President Lai returned from the United States, and in April of last year upon then-President Tsai Ing-wen's return from California.

Lai and his ruling Democratic Progressive Party reject Beijing's sovereignty claims, saying only Taiwan's people can decide their future.